Merits Of Gift Card Churning

Introduction:

With a lot of new readers, I want to go back to the basics for a little bit. Manufactured spending is a technique used purposely to create spend on your rewards earning card for little cost. Gift Card Churning is a manufactured spending technique whereby you buy and sell gift cards for the credit card rewards.

Ok, to get us back on track, my preferred method is gift card churning and here is why:

I can do almost everything at home, buying and selling

Some gift cards are sold electronically

No human interaction

Cents per point can be comparable to prepaid cards

For points 1 and 3, I want to stress that I do not want that to be misinterpreted as being afraid of seeing people. That is further from the truth. The first point makes manufactured spending at your leisure. If you want to do this right before you sleep or after you wake up, it is certainly possible. Snowed in from a recent snowmageddon? You can still manufactured spend.

Selling cards electronically is the the same reason as point 1, it is at your convenience. This activity can be done whenever you want and where ever you are. I’ve seen far too many posts on folks who are US citizens located internationally churning credit cards and have little to no ability to meet the minimum spend requirements. Gift card churn electronic gift certificates will allow them to meet the spend requirements in a breeze. If you have to mail in your cards, almost all of your supplies can be had for free and your shipping can be made free.

When there is human interaction, sometimes adverse action can happen. This is why people in this hobby absolutely hate and will berate individuals for calling the vendor as it brings attention to the transactions. The adverse action I’m referring to the human interaction is the cashier saying “no.” Depending on the store, you may or may not be denied buying prepaid cards with a credit card. Gift cards, it is done online and the website will accept your credit card payment.

The cents per point when you gift card churn can be near 0. If you’re lucky, there are sales that will allow you to buy points for free, like my most recent Bank of America BankAmeriDeal. I actually churn the most gift cards during the holidays because the portals raise the rates, offer spend bonuses, and credit cards with the 5% quarterly bonus pays for the points.

Is Gift Card Churning For You?

As with every technique for manufactured spending, you need to look at your strategy and how it fits for you. For me, gift card churning works best because I spend so much time in New York City, a wasteland trying to buy prepaid cards with credit. You must also realize this, gift card churning is often a cash losing proposition whereby it will cost you real money. I keep my cost basis anywhere from money making to up to $.01 per point or mile as I know when I redeem the miles and points, on the redemption side will be worth more than a penny. The only points that I buy at $.01 are the Chase Ultimate Rewards and using my American Express Starwood Preferred Guest card for SPG points.

Again, giftcard churning is a technique I would recommend for people who have US issued credit cards who are now international based. They can still get their miles and points cheap.

Conclusion

I want to reiterate why I gift card churn. I can go at my own pace without affecting anyone’s mood. I don’t need to wait in line and hear the groans from both the cashier or the customers waiting. Last time I was in Walmart loading my Bluebird card, one person in front of me started to complain out loud. Hearing the complains, this older lady also in front of me heard all of a sudden became Negative Nancy and started groaning about the length of the line and why it wasn’t moving. Gift card churning allows me to not get involved with situations like that. My new buddy at GiftCard Zen said he loves people like us, it makes many people happy along the way. Makes me happy because I have an outlet to get my cash and points for cheap, they love people like us because we sell non fraudulent cards, and their customers love us for reliable gift cards.

However, I’m still not convincing my self to follow the same path you do mainly the time that need to spend waiting. I think that you need to be patience and control your cost as well when you use this approach, waiting for good portal rate, hoping points will post correctly, selling back GCs, wait for check arrive then cash back in. I’m very interested to see your average monthly cost when doing GCC. But it’s always good to see different ways of MS as the lower hanging fruits are pretty much gone.

Sorry, just realized I didn’t answer another question. So far when I buy direct from the vendors I have been 100% successful buying gift cards and having the portals track. The 100% success rate is when I know the vendor will pay out. When I’m testing to see who pays out, that’s closer to like 20 to 25% where I am pleasantly surprised. When it’s buying from an exchange, I have had many issues with buying on Raise and having it track on TCB.

Forgive me if this has been addressed in the past, but what about income tax? I’m interested in this approach, but haven’t been able to find an answer. Do you have to declare your earnings from gift card sales, offset by your cost of purchase? Because that sounds like kind of a hassle…

Almost all of my gift card churns are money losers and any income that I’ve gained have been negligible. I would imagine if you are pushing large volumes and making money, then yes I think filing a 1099-MISC would be the best route

I want to warn others about the dubious relationship between Cardpool and TopCashBack. Following the advice of blogs preaching the merits of gift card churning opportunities and the 4% opportunity at topcashback, I have had three transactions for CardPool through TopCashBack all of which tracked 100% and were denied with no explanation. Unlike other merchants, there’s no way to file a claim. It’s simply tough luck we choose not to pay you. There some serious shady folks running that place and it seems like TopCash is in bed with them which is worse(99.5% success rating when nothing but negative reviews under the merchant? yeah right). I truly don’t say this lightly, but they’re ripping people off. Avoid them at all cost.

@parkerthon – I had a similar experience with them, but didn’t give it too much thought… here’s why… they only pay out on up to $1000 total transactions. I knew I’d go way over that fairly soon. So, even though I had around 25-50% of my transactions track but not pay out, I never felt it was worth the time to even look at it. On principle, though, it isn’t right. Definitely don’t go to cardpool for the 4% payout from tcb, because in my experience you can’t count on it.

I’ve had some excellent success with TCB, there was one time they did not track and it was for a hotels.com that I did not pursue further. In November 2014, there was a 20% cashback deal for Kohls and GiftcardMall and it didn’t track properly, but after the miss, I submitted the claim and they paid out in January. I felt like they did the right thing because I ordered a large amount before limits were introduced and they got the cash back to it.

Just to be clear, the only tracking I’ve had trouble with at TCB is cardpool. Other than that, as far as I remember, every other TCB purchase has posted properly. And, again, with cardpool I was sort of lax about it because I knew I’d blow through that $1000 limit pretty fast, so any time spent trying to chase it up or worry about it would’ve been wasted unless I expected them to not pay out on enough purchases to bump up against the $1000 limit.

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Saverocity is Journalist in Nature, please obtain Professional Representation prior to attempting anything discussed herein. Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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